Controller: City could save $8m by joining the 21st century

Controller Alan Butkovitz said city can save $8 million annually just by updating procurement system.

Alan Butkovitz said Mayor Michael Nutter's administration could be doing more to use technology as a cost-saver. Credit: Rikard Larma/Metro

The city has long been notorious for spending money on technological projects that are poorly implemented or don't pan out at all — citywide surveillance camera system, anyone?

So it may not come as a surprise to some that Philadelphia could save $8.1 million each year just by updating the technology it uses to procure vendors, according to an audit released today by City Controller Alan Butkovitz.

Butkovitz said the city's procurement systems haven't been upgraded in so long — over a decade — that they no longer support upgrades.

But $7.4 million could be saved annually by moving to a new eProcurement system that would eliminate the need for "manual, redundant, labor intensive and out-of-date business processes," according to his report. The switch would also allow the city to save an additional $750,000 through staffing reductions.

Butkovitz found an additional $4 million in savings could be achieved by amending the city's contract terms to allow for multiyear agreements with vendors, leading to greater competition. He said a Home Rule Charter provision requiring city contracts to last only one year discourages businesses from bidding.

"The authors of the 1951 City Charter could not have anticipated the way business is conducted in the 21st century," Butkovitz said. "The city should do what is necessary to take advantage of longer-term pricing and other vendor offerings.”

Butkovitz would like to see the savings generated from the implementation of his recommendations dispersed as temporary grant funds to municipal departments with the purpose of spurring additional technology investments.

"The reinvestment in technology will provide a steady source of funding through economies gained to fund future initiatives," he said. "It would halt the wasteful cycle of spending monies to maintain the current archaic, undesirable and unsustainable manual processes."